A peek into the secret world of sales leads -- and why you should care: Plain Dealing

View full sizePlain Dealer FileWhen consumers fill out online forms seeking loan quotes, they think it's all about the end result, the loan. But the real commodity is information, and it can change hands many times in ways consumers may never see.

Q. Recently, I started receiving calls from a car dealership about my application. I figured the salesman was just fishing since I drive an older car. Then I got a letter from a lender saying my loan application had been denied.

I never filled out a loan application. I checked my credit reports, but no inquiries show up. I don't want to call either of these places, but I'm worried.

-- Beth Grubb, Cleveland

A. Your information may have been used to perpetrate a scam, but the ultimate victim is -- swallow your coffee -- the car dealership.

Your question plunges us into the hidden world of sales-lead marketing, where information about consumers is sold and resold.

Car sales leads often are generated when a consumer goes to a website that advertises along the lines of "apply today for a free loan quote," fills out a form and checks a box allowing potential lenders to access his or her credit reports to generate a quote.

From a privacy standpoint, it's insane to input personal information on a website operated by someone you don't know and to allow that person's associates to have unlimited access to your credit reports.

However, when it all works the way its supposed to, a car dealer with finance partners and a willing consumer find each other in the vast wildness of the Internet. A car deal is consummated and everyone drives away happy.

We consumers think this is all about the end result -- the customer gets a car -- because the only sale we see is the final one.

The real commodity here is information -- name, address, date of birth and Social Security number -- a big fat gift that's even more prized because it includes permission to run a credit check.

It's valuable stuff, and it can be sold many times over before anyone strikes a deal with a consumer.

Any time there's a market for something, there's an opportunity for someone to exploit it.

That seems to be what happened here. It appears that someone slapped your name and contact information onto a online application that was fabricated -- not to get a loan, but for sale to the lucrative sales lead market.

You got sideswiped, but the damage isn't as bad as it seemedat first.

The Social Security number and birthdate on this lead aren't yours, which should be an enormous relief. It also explains why someone with your good credit would be denied for a loan and why no inquiries show on your credit reports.

No one checked your credit report. In fact, it's not clear that a file with this Social Security number exists.

While I encourage you to freeze your credit reports as a precaution, I doubt anyone is trying to get a loan in your name, since the contact information on the lead goes straight back to you. Only the world's worst ID thief would make that mistake. That, and there's no person actively trying to buy a car while pretending to be you.

With a lot of help from the companies that handled the lead, I've been able to piece together a bit about its history.

The sales lead came from a website that offers car loan quotes. There's no information on the site about who runs it. It's registered through a proxy. I haven't been able to contact the site's principals, so I don't know whether the lead was created there.

The lead wound up at LEAPLab, an Arizona company that acts as sort of a trading floor for sales leads. "We have affiliates that are looking to sell their leads and we have on the other side buyers," said John Ayers, LEAPLab's chairman.

There is some funny business in the sales-lead market, and LEAPLab analyzes leads to check for "data inconsistencies" and weed out lead generators that sell leads to multiple parties but claim their leads are exclusive. But Ayers said it can be hard to spot individual files as ringers, depending on how the data gets input into the system.

The marketers don't do credit checks because they don't deal with consumers. Their job is moving leads, lots of them, very fast.

When LEAPLab receives an encrypted lead from a seller, it shoots some of that information to marketing companies, which can either buy the lead or pass. "All this is done in milliseconds," Ayers said.

The lead with your name was snapped up by JM Advertising, a Florida marketing company that works with a network of dealers. Jeff O'Neill of JM said his company generates leads on its own but also may buy a lead another marketer can't use, for example, because that marketer doesn't have a dealer in the right location or the consumer doesn't have the right credit profile.

O'Neill says bad leads occasionally get into the pipeline. He has seen instances in which a consumer fills out an online payday loan application and then that information is sold as a car sales lead. O'Neill says the company tries to vet the leads before it resells them to dealers.

JM's records show the company called you early Feb. 21, O'Neill said. It would have left a message telling you it had received your application and to contact if you weren't looking for financing. When you didn't return the call, JM concluded that the lead was still good. It sold it the lead to longtime customer Ganley Lincoln Mercury the same day.

Ganley paid $23 for the lead.

"Most of the leads we buy are good," said Ganley sales manager Ron Courey Jr. The leads are valuable because they let the dealership contact only those people who want to hear from them. Hence, the calls from Ganley to you.

"We didn't pick the name out of a hat," Courey said. "Someone filled out an application online somewhere."

When Ganley gets a lead for a "credit challenged" customer that includes approval for a credit check, it ships the info off to a service called Dealer Track that tries to rustle up financing.

Coastal Credit, a lender that accepts only consumer credit applications through dealers, wound up with the credit request and denied the loan. By law, it had to notify you that it had denied the application based on a credit report, or the lack of a credit report.

Whose credit report the company really checked, we don't know, but that letter was your first clue that something was amiss.

Ganley, JM and LEAPLab all shared a copy of the lead they bought. Each version shows the same mismatched information.

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